Government to sell 5 per cent in ONGC, 10 per cent in IOC

The government proposes to sell a 5 per cent stake in Oil and Natural Gas Corporation (ONGC) and a 10 per cent stake in Indian Oil Corporation Ltd (IOC) to raise an additional Rs20,000 crore these fiscal, reports quoting official sources said.

The ministry of petroleum and natural gas is reported to have received a note from the department of divestment stating that the finance ministry has cleared divestment in ONGC and IOC.

A follow-up offer of 5 per cent (or about 106 million shares) of Rs1,233.25 each (at current prices) in ONGC would fetch the government around Rs13,190 crore.

The government currently holds over 74 per cent equity in ONGC and a 5 per cent sale would pare this to a little over 69 per cent.

At the current stock price of Rs363.90, the sale of 10 per cent equity capital or 242.7 million shares would fetch IOC around Rs8,835 crore. In addition, the government would sell 10 per cent of its holding (about 190 million shares) to raise around Rs7,000 crore.

IOC is embarking on a Rs75,000 crore capital expenditure programme and the funds would be utilised to part finance the investment.